If an employee from Ireland is working in a different country, they might not need to pay income tax in Ireland. A PAYE Exclusion Order is a certificate issued by Revenue that tells employers not to deduct PAYE or Universal Social Charge (USC) from payments to an employee.
You can apply to have a PAYE Exclusion Order issued if all of the following apply:
- You’re an Irish employer
- The employee carries out all of the duties of their employment abroad
- The employee is considered a nonresident in Ireland for tax purposes during the tax year
A PAYE Exclusion Order can also be issued if all of the following apply:
- You’re an Irish employer paying an occupational pension to an ex-employee
- The ex-employee is a nonresident in Ireland for tax purposes during the tax year
- The ex-employee is a resident in a country with which Ireland has a double taxation agreement
If an exclusion order is issued for an individual employee, payroll administrators must add the exclusion of PAYE and USC deductions to an employee's record, which takes priority over existing RPN information.
You can configure a PAYE exclusion order in Dayforce to exclude employees from PAYE and USC deductions and calculate employee deductions at the legal entity level without the need for manual overrides. PAYE exclusions are configured in the Payroll > Tax Definitions screen in People, in the PAYE Exclusion Order section.
To add a PAYE exclusion order at the legal entity level, specify the Effective From and Effective To dates, select the Exclude checkbox and select the Legal Entity.